Suit is the latest in a long-running investigation of firms that sold defective gear to military and law enforcement agencies.
Last week the Justice Department filed a lawsuit against Braintree, Mass.-based First Choice Armor and Equipment, along with the company's founder and president, for submitting false claims for bulletproof vests purchased with federal funds for federal, state, local and tribal law enforcement agencies.
The suit is the latest development in an ongoing investigation involving inspectors general and criminal investigators from the General Services Administration and the Defense, Homeland Security, Justice, State and Treasury departments.
The defective vests were sold between 2000 and 2005. A Justice spokeswoman could not say how many still might be in use or by which agencies.
At issue is First Choice Armor's use of a product called Zylon, a fiber manufactured by Toyobo Co. and used by First Choice Armor and other companies to produce bulletproof vests. Zylon degrades quickly, especially in hot and humid conditions.
Justice previously filed suits against Toyobo Co., Second Choice Body Armor and Honeywell International Inc., which also manufactured Zylon vests or components for them. Five other companies have settled suits with Justice for more than $47 million.
The department maintains that First Choice Armor and its founder knew about problems with Zylon fiber that made it unsafe for ballistic use at the time the company was selling the vests to law enforcement agencies. When the department's National Institute of Justice tested eight of First Choice's bulletproof vests in 2005, all failed.
The lawsuit accuses the company's founder, Edward Dovner, and president, Karen Herman, with fraudulent conveyance -- a transfer of property that is made to swindle, hinder or delay a creditor -- in violation of the 1990 Federal Debt Collection Procedures Act. Dovner and Herman are married.
"The government alleges that after learning of the investigation into Zylon bulletproof vests, Mr. Dovner and Ms. Herman removed more than $5 million from First Choice. Mr. Dovner then purchased a Ferrari, a Maserati and a private jet through various shell companies," according to a statement issued by Justice.
In a statement, First Choice Armor said the claims are without merit and the company will defend itself in court.